Listed pot stock ranks to fire up

It's not easy being green, especially in the increasingly crowded "pot" stock sector on the ASX.

But Bell Potter Securities is lining up to bring yet another hemp healthcare group to the local exchange - although, this one is having a bet each-way with a leg in the United States market and one firmly in Australia.

Street Talk understands Elixinol, founded by one of the pioneers of the hemp industry, Paul Benhaim, has completed a private fundraising through Bells, with a handful of high net worth individuals and both local and offshore institutions injecting fresh capital into the business.

Paul Benhaim is the founder of ASX aspirant Elixinol. Supplied

The next step is an initial public offering within 12 months, with Elixinol tipped to have an enterprise value of $100 million.

The pre-IPO funds have two destinations, according to investor sources. Part of the capital has been ear-marked to speed up the licence application process and scoping studies for Elixinol's medicinal cannabis business in Australia, with another chunk headed to its sister company in the United States, Elixinol LLC, which makes hemp nutraceuticals - basically dietary supplements using the various iterations of the hemp plant.

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The pitch to listed equities investors will be that this is a real business, making real profits - the revenues of Elixinol LLC are in excess of $US7.5 million - and with three options for growth: hemp nutraceuticals, medicinal cannabis and hemp-based foods (for which approval in Australia is expected in November this year).

Investors have been forced to expand their usual research avenues in this still fairly new industry segment. Hemp Business Journal estimates that the total value of the hemp products sector in the US in 2016 was $US688 million.There are expectations that the entire US hemp nutraceuticals will triple its sales in the next three years to beyond $US1 billion.

Benhaim, who established Hemp Foods Australia in 1999, has a strong pedigree in the hemp industry. He's based in the Northern Rivers region of NSW, which is regarded as the spiritual home of the cannabis caper.

Joyce Moullakis writes on banking and finance, specialising in Investment Banking, Private Equity, Financial Services. Based in our Sydney newsroom, Joyce has over 12 years experience as a finance journalist, including a stint at Bloomberg News in London. Connect with Joyce on Twitter. Email Joyce at jmoullakis@afr.com.au